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Is Streaming Finally About to Become Profitable? Can Industry Gains Post-Strikes Continue?

Is Streaming Finally About to Become Profitable? Can Industry Gains Post-Strikes Continue?

Paramount, Disney and Warner Bros. Discovery all showed promising signs of life from their streaming segments last quarter, but is it sustainable?

There’s no denying that 2022 was a dark year for streaming. Companies were still adding hoards of new subscribers, but Wall Street suddenly had a new focus: profitability. Only Netflix had any claim to be a profitable streaming business in 2022, as services like Disney+ and HBO Max (now simply Max) posted losses of hundreds of millions of dollars or more from their streaming divisions.

  • Disney, NBCUniversal, Netflix, Paramount, and Warner Bros. Discovery all posted impressive results this past quarter.
  • Each — apart from Netflix, which is profitable — has managed to narrow their streaming losses considerably.
  • Carriage deals like the Disney-Spectrum agreement will be crucial if companies want to sustain their streaming gains.

The Path to Profits is Clear, But Who is Walking It?

The three-month period between the start of July and the end of September is the third quarter for most companies in the entertainment world. In 2023, that quarter showed impressive results from some of the biggest media companies in the business, particularly from their streaming segments.

Disney, for example, managed to add customers on all of its streaming platforms during the quarter. In Q3 2022, the company lost $1.4 billion from its streaming arm; this year, those losses have dwindled to $240 million. CEO Bob Iger has said the company will see a profit from its streamers in 2024, and that goal looks eminently achievable.

Warner Bros. Discovery is already seeing a streaming profit. That company was assailed from many sides last year as it slashed content from its streaming platforms, mothballing the essentially complete “Batgirl” movie because CEO David Zaslav didn’t think made-for-streaming content would equate to a substantial financial gain for his company. WBD lost $634 million from its streaming services last Q3, but this year it turned in a profit of $111 million from that part of the company.

Paramount and NBCUniversal also had good quarters from their streaming services, and Netflix added nearly 9 million global users in Q3 2023. The salad days of streaming seem to have arrived, but there’s one big caveat that is tempering Wall Street’s enthusiasm for the long-term profitability of streaming as an industry.

Will Strikes Ending Also End Good Times for Streaming Providers?

From the perspective of studios and streaming providers, the end of the SAG-AFTRA and WGA strikes that shut down productions across Hollywood during the summer and fall is undoubtedly a good thing. But for those companies that also have a streaming service, the strikes did have their silver linings.

Most notably, streamers did not have to pay to create new content while the strikes were on. Most streaming platforms had a large pipeline of content ready to go when the strikes began, and while many were nearing the end of that reservoir by late October and early November, true desperation for new scripted series wouldn’t have set in until 2024. These streaming services got to keep serving up new scripted shows at a rate similar to that which users saw before the strikes began, and since linear TV networks did not have a similar backlog, streaming became a haven for TV audiences desperate for a new series.

So now that the strikes are over, what can streamers do to ensure revenues stay up? One key could be finding similar carriage deals to the one Disney recently reached with Spectrum. That deal allows all Spectrum cable customers to access ad-supported Disney+ free of charge, while Disney collects a lump sum for all of those users from Spectrum and still gets to keep advertising revenues from the influx of new viewers.

Zaslav recently trumpeted the deal between Disney and Spectrum as a model for other streaming and cable providers to emulate, saying that Max could be bundled with cable plans soon as well. If such deals generate meaningful average revenue per user (ARPU) for streaming services, they will certainly help keep streaming revenues high for the companies that own them, even as they get back to the business of actually creating new shows and movies.

There are still plenty of questions to be answered about the future economics of streaming. But streaming providers may have cracked the code when it comes to making their services profitable, and though customers can fairly gripe that breakthrough has come thanks to a wave of price increases for seemingly every streamer, better revenue could be sustainable if streamers follow the right tactics moving forward.

Max

Max is a subscription video streaming service that gives access to the full HBO library, along with exclusive Max Originals. There are hubs for content from TLC, HGTV, Food Network, Discovery, TCM, Cartoon Network, Travel Channel, ID, and more. Watch hit series like “The Last of Us,” “House of the Dragon,” “Succession,” “Curb Your Enthusiasm,” and more. Thanks to the B/R Sports add-on, users can watch NBA, MLB, NHL, March Madness, and NASCAR events.

Max has three tiers, an ad-supported plan for $9.99 an ad-free plan for $16.99, and the ultimate tier that includes 4K for $20.99.

All Max subscribers will get the full libraries of shows like “Friends”, “The Big Bang Theory”, “South Park”, “Fresh Prince of Bel-Air”, “The West Wing”, and more.

You can choose to add Max as a subscription through Amazon Prime Video, Hulu, or other Live TV providers.


David covers the biggest news stories, live events, premieres, and informational pieces for The Streamable. Before joining TS, he wrote extensively for Screen Rant and has years of experience writing about the entertainment and streaming industries. He's a Broncos fan, streams on his Toshiba Fire TV, and his favorites include "Andor," "Rings of Power," and "Star Trek: Strange New Worlds."

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